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Common Questions about Estate Taxes Answered by California Tax Lawyers

Friday, October 7, 2011

Many people don’t have the slightest of ideas what estate taxes are or its relevance to them. If you are located in the state of California, you may want to consult California tax lawyers to orient you with the ins and outs of estate taxes in your state. California tax lawyers will be able to answer all your questions about estate taxes, as well as provide you with recommendations that will be advantageous to your situation.

Below are some of the commonly asked questions about estate taxes that California tax lawyers are normally asked about.

  1. What are estate taxes?

Generally speaking, estate taxes are taxes levied on the relocation of your assets to your heirs at your death. However, the value these properties must first go beyond a certain limit before estate taxes are imposed. Your California tax lawyers can help you determine the value of your properties while you are still alive to help you find ways how to incur low estate taxes.

  1. Are all my properties levied with estate taxes? At the time of your death, everything you own will be accounted for and their fair market value will be determined, which will be the basis of your estate taxes.

Properties which may be taxed may include cash, real estate, securities, insurance, trusts, business interests and other assets. For more information regarding which of your properties may be levied with estate taxes, you may consult your California tax lawyers.

  1. Fair market value, what is it? If you are confused regarding what “fair market value” means, your California tax lawyers will explain it in such a way that it is simpler to understand. In lay man’s definition, it means the value of your properties when you and your buyer are not forced to sell or buy, respectively. Your California tax lawyers will be able to help you determine the fair market value of your properties.

  1. What properties are excluded from estate taxes? Knowing which of your properties are excluded from estate taxes is not only important, but can also be a strategic move on your part. Your California tax lawyers can use this information to suggest transactions aimed at lowering your estate taxes so that your heirs can inherit your properties intact. Some properties that may not incur estate taxes include:

  • Properties owned solely by your spouse or children
  • Lifetime gifts
  • Properties given to you but which you have no control of at the time of your death

There are some nuances to these, that’s why seeking the counsel of California tax lawyers will be to your benefit.

  1. What deductions are available to reduce the Estate Tax?

There are also deductions to reduce the amount of estate taxes you owe, and you will learn about these things further by consulting you California tax lawyers. Some of the deductions available are:

  • Marital Deduction
  • Charitable Deduction
  • Expenses of the estate
  • Debt and Mortgages

Your California tax lawyers can further explain which of these deductions are applicable to you to lower the estate taxes you incur.

Knowing what estate taxes are is not only important but also strategic. Consulting California tax lawyers will therefore be for your own benefit. With your California tax lawyers plotting your well-designed estate plan, you will have the security of knowing that when you die your heirs will be able to get what they rightfully deserve.

Resources

To know more about estate taxes, visit the IRS page for estate taxes. You may also visit the California State Controllers page about California estate tax information. Furthermore, the California Tax Service Center website offers information about tax laws in the State of California.